Hon. A. J. MacEachen (Minister of National Health and Welfare):
Mr. Speaker, earlier, in the house, I indicated the government's intention to provide a further program of income support for older persons in Canada. I promised members I would give the house a general outline of this program before we adjourned for the summer. I am pleased to carry out that commitment, but before I do there are a number of comments I would like to make.
First, I believe the action taken earlier by this house in approving the Canada Assistance Plan will be of real assistance to many older people. Also medicare, when it comes into effect, will bring substantial benefits; indeed, it will be of special importance to older people, just as hospital insurance has been.
I would also remind the house that since this government took office the flat rate pension has been increased from $65 a month to $75. Some 100,000 persons have been brought under the old age security program this year through lowering of the eligibility age to 69 and in January of next year, when the eligibility age will be dropped to 68, another 100,000 will receive full benefits. This yearly reduction in the eligibility age will continue until 1970 when all persons 65 and over will be entitled to the flat rate pension.
By this time, 1970, the flat rate pension will be available as a matter of right to some one and a half million persons age 65 and over. Also, of course, a steadily increasing level of retirement benefits will be payable under the Canada Pension Plan, commencing next January. The Canada Pension Plan, we feel,
will largely solve the problem of basic retirement pensions when its provisions come fully into effect and pensions are payable at the full scales provided in it. The plan in itself is a generous one.
There are, however, many older people in Canada who cannot benefit fully, or at all, from the Canada Pension Plan, because they are already past the retirement age or because they will be retiring before the plan becomes fully operational. I do not have to remind the house that the position of this particular group has been of considerable concern to this parliament and to this government.
[DOT] (2:40 p.m.)
I would also note the recommendation of the joint committee on the Canada Pension Plan urging further measures on behalf of those people who, because they are or soon will be retired, will not be substantial contributors to or beneficiaries from the Canada Pension Plan.
The increase in the monthly flat rate pension and the lowering of the eligibility age are in line with this recommendation, but clearly this is not all that is needed. I can assure the house that the government, and more particularly my department, has for some time been exploring various additional ways through which adequate assistance can be provided for this group of people. I would recall, for example, a speech which I gave on March 2 in Regina in which this problem was discussed. At that time I noted that a considerable number of older persons would not be able to take advantage of the Canada Pension Plan. I went on to discuss some of the various approaches which were being considered to meet this problem.
It is apparent, then, that a further program of benefits should be considered for persons in this particular age group. We propose to introduce a program that will guarantee a minimum monthly income of $105 to old age security recipients.
The details of such an income guarantee program are now being considered. The total payments which will be required under this program will, of course, decrease over the years, as the Canada and Quebec pension plans come into effect and pay increasing benefits.
July 14, 1966
Old Age Security Income Announced
The program is being provided with these two plans in mind and is specifically designed for those people who are not and will not, because of age, be able to take advantage of the contributory pension plans. This, as I said, is in line with the recommendations of the special joint committee. Because it is an income guarantee program, and because of the increasing benefits that will be available under the Canada and Quebec pension plans, the burden on the federal treasury will be almost entirely a transitional one.
By using the contemporary income guarantee formula rather than the flat rate increase it is felt that income support can be provided at a higher level for a given outlay of funds. Through this income guarantee program the needs of the older citizen can be more adequately met in a way that is financially responsible and least burdensome on the treasury.
I can inform the house that such a program will be presented to parliament for approval in the autumn, after parliament has reconvened.
It is estimated that the annual cost to the treasury of such a program will be in the neighbourhood of $225 million at the beginning. The revenue measures that will be needed to meet the burden which these supplementary benefits will place on our national finances are also being considered.
Subtopic: ANNOUNCEMENT OF GUARANTEED MINIMUM MONTHLY INCOME